Share This Story!

Icahn's Twitter release to be followed by billions more

SAN FRANCISCO -- Billionaire financier Carl Icahn's use of Twitter to disclose his position in Apple is going to be used as a blueprint by companies, investors and Wall Street firms for the rest of this

SAN FRANCISCO — Billionaire financier Carl Icahn's use of Twitter to disclose his position in Apple is going to be used as a blueprint by companies, investors and Wall Street firms for the rest of this decade, if not longer.

Here's why: Apart from the fact that it boosted Apple's market value by about $20 billion — making it one of the most-profitable tweets yet — the Icahn approach to Twitter toed the line on U.S. securities laws.

He first filed a document with the Securities and Exchange Commission on Monday via his investment vehicle, Icahn Enterprises, which is listed on the Nasdaq under the ticker "IEP."

In the filing, Icahn stated that he might use Twitter to release information that could be considered "material."

He also released the same information on his website the same day, a day before he tweeted his position in Apple and made one thing clear: Twitter has become not only a nascent news medium, but the Internet version of a new financial news wire.

The business of providing to Wall Street traders and big investment houses information which can move a stock is today worth billions of dollars in annual revenue.

It's been dominated for the last decade by Bloomberg, the Reuters news unit of Thomson and Dow Jones Newswires.

That means if Twitter is planning an IPO soon — and USA TODAY has found that two of the job positions the company has listed for hire indicate that Twitter is preparing a filing — its revenue stream might be more diverse than just selling ads.

If Twitter becomes a de facto news wire — with any investor or company able to use it to distribute material information — it will have the capacity to take future revenue away from those three huge news operations.

Twitter may one day do to business and technology news writing a bit of what Google has done already to the business side of general news — suck about $50 billion a year away from its revenue stream.

After Icahn's tweet became the biggest market-moving story of the day on Tuesday, there's no going back.

Regular readers of this column will remember, however, that Icahn isn't the first high-profile user in the business or tech world to use Twitter to release information that raised the price of a stock he already owned, and significantly.

Back in April, we wondered whether the use of Twitter by Tesla Motors CEO Elon Musk to flag material company news revealed that the SEC had fallen behind the technology curve in ensuring the same level of transparency for all investors in publicly listed companies.

Not that this columnist thinks the markets are fully transparent today. Those with access to earlier information still have a clear advantage on retail investors.

That same week, the SEC did indeed issue such rules, which state that a company must first, before disclosing any material information in a tweet, make an SEC filing and put out a news release stating its intention to use Twitter for that purpose.

That's what Icahn did, which means he played by the rules and set a standard by which future stock promoters on Twitter will be judged.

And he just happened to tweet his tweet on the same day that Apple's share price rose above the line that tracks its 200-day moving average on a stock chart.

That hadn't happened in about two years.

That means any income investor who's not in Apple right now may want to let someone else manage their money. (See our July 28 column on why growth investors should not be in Apple right now.)

With Icahn buying shares, there's a floor under the price. If he gets a stake large enough to lean on Apple CEO Tim Cook and the rest of the company's board to divest more of its $140 billion worth of cash and securities, the dividends will be fat and growing for some time.

The 6%, two-day rise in Apple shares that Icahn helped via Twitter (along with, arguably, the breaching of the 200-day line) showed that he may already have that leverage.

John Shinal has covered tech and financial markets for 15 years at Bloomberg, BusinessWeek, the San Francisco Chronicle, Dow Jones MarketWatch, Wall Street Journal Digital Network and others.